Lockheed Martin Corporation (LMT): A Bull Case Theory

We came across a bullish thesis on Lockheed Martin Corporation on Scalper's Lounge’s Substack by scalpavelli. In this article, we will summarize the bulls’ thesis on LMT. Lockheed Martin Corporation's share was trading at $456.85 as of September 4^th. LMT’s trailing and forward P/E were 25.64 and 15.46 respectively according to Yahoo Finance.

Lockheed Martin stands as one of the most durable businesses globally, yet market skepticism has created a disconnect between perception and reality. The stock offers ~35% upside over the next 18 months, supported by durable earnings power and catalysts that the market misunderstands. The F-35 program, often criticized for delays, cost overruns, and underwhelming early performance, is entering a critical upgrade cycle that transforms its capabilities, akin to moving from an “iPhone 6” to an “iPhone 12.”

While stealth may not have lived up to its original promise, the F-35 has achieved scale with over 1,000 planes in service, a multi-year order backlog, and unmatched global integration. Its modular software and hardware refresh, combined with its role as a global intelligence-sharing platform, create a moat that is difficult for rival programs to replicate. Despite losing the NGAD contract, Boeing’s desperation and the high probability of NGAD delays and export restrictions mean Lockheed may ultimately benefit.

Lockheed also retains meaningful optionality across its portfolio. Missile systems, which are increasingly central to U.S. defense policy, provide a durable tailwind, while upgraded F-16s continue to sell strongly, and the possibility of revitalizing the F-22 remains underappreciated. International competitors face production and cost constraints, leaving the F-35 as the only scalable fifth-generation solution for most countries.

Concerns over write-downs, anti-U.S. sentiment, or stealth obsolescence overlook the fact that the program has already achieved “escape velocity,” with development entrenched in allied supply chains and political economies. With defense companies universally recognized as too critical to fail, Lockheed’s current valuation at ~15x earnings and substantial shareholder returns presents a mispriced opportunity in a resilient, strategically indispensable franchise.

Previously we covered a bullish thesis on Lockheed Martin Corporation by Steve Wagner in April 2025, which highlighted strong first-quarter results, a robust order backlog, improved segment margins, and the strategic Amentum acquisition. The stock has depreciated by 2.13% since coverage, as short-term skepticism lingered. The thesis still stands, while Scalpavelli shares a similar view but emphasizes the F-35 upgrade cycle and underappreciated missile and fighter jet optionality.

Lockheed Martin Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held LMT at the end of the first quarter which was 65 in the previous quarter. While we acknowledge the potential of LMT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.